ACIT, Circle-10(1), Hyderabad V. Smt. Sunitha Devi Gaggar, Secunderabad

ITA 910/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66425 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 12-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A SUDHAKAR REDDY
• Keywords: Capital asset; Business income
• Section: 143(3); 43(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 910/HYD/2011 ASSESSMENT YEAR: 2007-08 ASST. COMMISSIONER OF INCOME-TAX, ... APPELLANT CIRCLE 10(1), HYDERABAD. VS. SMT. SUNITHA DEVI GAGGAR , RESPONDENT SECUNDERABAD. APPELLANT BY : SHRI A. SUDHAKAR REDDY RESPONDENT BY : NONE DATE OF HEARING : 16/10/2012 DATE OF PRONOUNCEMENT : 31/10 /2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-VI, HYDERABAD DATED 28/01/2011 FOR THE ASSESSMENT YEAR 2007-08. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME FOR THE Y EAR UNDER CONSIDERATION ON 11/10/2007 ADMITTING AN INCOME OF RS. 2,10,32,078/- CONSISTING OF INCOME FROM HOUSE PROPE RTY, INCOME FROM OTHER SOURCES, DIVIDEND AND SHORT TERM CAPITAL GAINS. THE AO COMPLETED THE ASSESSMENT U/;S 143(3) AND COMPUTED T HE PURCHASE AND SALE OF SHARES UNDER THE HEAD BUSINES S INCOME AND DETERMINED THE BUSINESS PROFIT AT RS. 1,92,23,888/- . 2 910/HYD/2011 SMT. SUNITHA DEVI GAGGAR 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED THE APPEAL BEFORE THE CIT(A). 4. BEFORE THE CIT(A), THE ASSESSEE FILED WRITTEN SU BMISSIONS, WHICH WERE EXTRACTED BY THE CIT(A) IN HIS ORDER AT PAGES 7 TO 10, WHICH ARE REPRODUCED BELOW: I) I AM NOT A TRADER IN SHARES. THE INVESTMENT IN SHARES HAS BEEN DONE WITH PURELY AN INTENTION OF CAPITAL APPRECIATION. A CCORDINGLY, THE GAIN FROM SHARES HAS BEEN REEINVESTED AS I DO NOT HAVE ANY CA PITAL. II) I AM NOT REGISTERED WITH ANY RECOGNIZED STOCK EXCHANGE NOR DO I POSSESS THE REQUISITE KNOWLEDGE TO CARRY ON BUSINES S IN SHARES. III) THE FREQUENCY OF TRADING HAS BEEN ON THE HIGHE R SIDE COMPARED TO NORMAL TRANSACTIONS ON ACCOUNT OF THE VOLATILITY OF THE MARKET. THE FLUCTUATIONS IN THE MARKET WERE OF SUCH NATURE THAT IT WAS NOT ADVISABLE TO HOLD ONTO THE SHARES DURING SUCH PERIOD. IV) FOREIGN INSTITUTIONAL INVESTORS HAVE INVESTED IN INDIAN STOCK MARKETS IN A BIG WAY. V) THEY ARE NOT TREATED AS TRADERS AND THEIR INCOME IN SPITE OF HIGH FREQUENCY AND VOLUME OF TRANSACTIONS IS TREATED AS CAPITAL GAINS. VI) THEREFORE, I SUBMIT THAT THE GAIN FROM THE SALE OF SHARES IS INCOME FROM CAPITAL GAINS AND NOT BUSINESS INCOME. VII) THE INTENTION WAS NOT TO CARRY ON TRADING OF S HARES BUT ONLY FOR THE PURPOSE OF CAPITAL APPRECIATION. THEREFORE THE PURC HASE OF SHARES WAS MADE WITH THIS INTENTION. HOWEVER, WHEN THERE WAS A CONSIDERABLE FALL IN THE SHARE PRICES WITHIN A SHORT SPAN OF TIME THE BE ST ALTERNATIVE WAS TO SELL THE SHARES IN ORDER VIII) THE TREATMENT IN THE BOOKS OF ACCOUNTS IS NOT IN THE NATURE OF STOCK IN TRADE BUT THAT OF INVESTMENT. IX) THE TRANSACTION OF SALE OF SHARES IS ONLY ON AC COUNT OF MARKET FLUCTUATIONS. I DO NOT POSSESS THE NECESSARY SKILLS OF A STOCK TRADER NOR AM I REGISTERED WITH THE STOCK EXCHANGE. X) I HAVE DISCLOSED SHORT TERM CAPITAL GAINS FROM T RADING IN FUTURES AND OPTIONS. XI) THIS WAS ENTERED INTO ONLY FOR THE PURPOSE OF H EDGING AGAINST THE VOLATILITY OF THE MARKET. XII) THIS HAS BEEN TREATED AS SPECULATIVE TRANSACTI ON. FUTURES AND OPTIONS FALL UNDER THE DEFINITION OF A DERIVATIVE. DERIVATI VE BY ITS NATURE IS A CAPITAL 3 910/HYD/2011 SMT. SUNITHA DEVI GAGGAR ASSET, THEREFORE, ANY GAIN OR LOSS ARISING FROM SUC H DERIVATIVE WOULD BE A CAPITAL GAIN OR LOSS. MOREOVER, TRADING IN DERIVATI VES HAS BEEN SPECIFICALLY EXCLUDED FROM THE PURVIEW OF THE SPECULATIVE TRANSA CTION AS STATED IN SECTION 43(5) (D) OF THE INCOME TAX ACT, 1961. PLEA SE REFER TO THE STATEMENT OF FACTS FILED ALONG WITH FORM 35. XIII) WITH THE AMENDMENT BROUGHT ABOUT BY THE FINA NCE ACT, 2004 TO SECTION 111A THE RATE APPLICABLE FOR SHORT TERM CAP ITAL GAIN WAS REDUCED TO 10% ON ACCOUNT OF THE INTRODUCTION OF SECURITIES TRANSACTION TAX. THIS AMENDMENT WOULD SHOW WHAT WAS SOUGHT TO BE ACHIEVED BY LEVYING TAXES AT 30% FOR SHORT TERM CAPITAL GAINS WAS SOUGHT TO B E REPLACED BY SECURITY TRANSACTION TAX ON THE VOLUME OF TURNOVER INSTEAD O F INCOME TAX ON GAINS. THEREFORE, ON THE INTRODUCTION OF SECURITIES TRANSA CTION TAX, SHORT TERM CAPITAL GAINS WAS TAXED AT 10% AND SECURITIES TRANS ACTION TAX WAS ALSO PAID ON THE SAME. THE AGGREGATE OF BOTH THESE LEVIE S WAS WHAT WAS PREVAILING BEFORE THE AMENDMENT. XIV) WITHOUT PREJUDICE TO THE AFORESAID SUBMISSIONS , I MAY ADD THAT IN RESPECT OF THE FOLLOWING COMPANIES SHARES THE PERIO D OF HOLDING HAS BEEN MORE THAN 100 DAYS AND IN RESPECT OF SHARES OF OTHE R COMPANIES WHERE THE SHARES HAS BEEN HELD FOR SHORTER PERIODS IS BEC AUSE OF VOLATILE MARKET FLUCTUATIONS. SL.NO. COMPANY PERIOD OF HOLDING PLEASE SEE PAPER BOOK NO. CAPITAL GAIN 1 ANSAL PROPERTIES 141 1 14,87,933 2 JAI CORPORATION 104 1 27,361 3 TANLA SOLUTIONS 262 353 3 70,48,210 4 UNITECH 133 133 217 222 231 3 66,45,057 5 HIND MOTORS 116 130 3 (87,167) 6 ASTRO MICRO (BONUS) 230 244 4 1,99,851 184 EXCEL CORP 127 4 (56,494) 8 ITD CEM 147 128 4 67,873 9 NEW STD ENG 180 4 38,939 10 JAIN IRRIGATION LTD. 153 5 69,585 11 ABG HEAVY 245 246 5 25,874 12 SYNERGY MULTY 184 188 188 5 47,342 13 W.S. INDUSTRIES 217 5 7526 4 910/HYD/2011 SMT. SUNITHA DEVI GAGGAR 14 D.S. KULKARNI 129 5 85,971 15 UT LTD. 124 6 (56,051) 16 ION EXCHANGE 185 6 (23,003) 17 FULFORD 135 6 (2173) 18 CEATLDM 135 6 (30,685) 19 ABC BEARING (ANTIF) 126 127 6 (5123) 20 SHREYA SHIP 122 6 37,760 21 KALPATARU POWER 237 269 6 1,89,138 TOTAL 1,57,17,730 XV)THE TOTAL GAIN DISCLOSED IS RS. 1,91,97,162 FROM THE SALE OF ALL THE SHARES. IN RESPECT OF SHARES WHERE THE PERIOD OF HO LDING IS MORE THAN 100 DAYS AS SHOWN ABOVE THE TOTAL GAIN IS RS.1 ,57,17,7 30 WHICH CONSTITUTES ABOUT 82% OF THE GAIN. THEREFORE IT IS MY SUBMISSIO N THAT THE INCOME DISCLOSED UNDER THE HEAD CAPITAL GAINS AT RS.1 ,92, 04,038 IS TO BE ASSESSED AS SHORT TERM CAPITAL GAINS. XVI) YOUR KIND ATTENTION IS INVITED TO PAGES 7-74 O F PAPER BOOK WHEREIN THE VOLATILE FLUCTUATIONS IN THE SHARE MARKET ARE REFLE CTED. THE DRASTIC FALL IN PRICES COMPELLED ME TO SELL SOME OF THE SHARES WITH IN A SHORT PERIOD. XVII)THE SHARES CONSTITUTING 82% OF THE TOTAL GAIN AS STATED ABOVE HAVE BEEN HELD FOR ATLEAST 100 DAYS. MOREOVER, THERE WAS NO REPETITION IN THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES. XVIII) MERELY BECAUSE THE SHARES HAD BEEN PURCHASED FROM INTEREST FREE BORROWED FUNDS WOULD NOT CHANGE THE NATURE OF THE T RANSACTION FROM INVESTMENT TO IN THE NATURE OF AN ADVENTURE IN THE NATURE OF TRADE. THE INTENTION WAS ALWAYS TO TREAT IS AS INVESTMENT AND NOT DEALING IN SHARES WHICH IS APPARENT FROM THE FACT THAT THE SHARES HAD NOT BEEN TREATED AS STOCK IN TRADE. PRECEDENTS - SR.NO. CITATION REPORTED REMARKS 1 CIT VS. NSS INVESTMENTS (P) LTD., MADRAS HIGH COURT 277 ITR 0149 SHARES IN QUESTION WERE HELD FOR EARNING DIVIDEND AND NOT AS STOCK IN TRADE. SHARES SHOWN AS INVESTMENTS AND NOT AS STOCK IN TRADE. INCOME HELD AS CAPITAL GAINS. 2 KHAN BAHADUR AHMED ALLAUDIN & CO. VS. CIT, AP HIGH COURT 62 ITR 490 SHARES WERE PURCHASED AS INVESTMENT & FOR ACQUISITION OF CAPITAL ASSET AND THE LOSS OWING TO REDUCTION IN VALUE OF SHARES 5 910/HYD/2011 SMT. SUNITHA DEVI GAGGAR WAS A CAPITAL LOSS AND NOT REVENUE LOSS. 3 RAMESHWAR PRASAD BAGLA VS. CIT, SC 87 ITR 421 A) CIRCUMSTANCES THAT THE APPELLANT TOOK A LOAN FOR PURCHASE OF SHARES WOULD NOT BY ITSELF SHOW THAT THE PURCHASE WAS NOT TO FACILITATE THE CARRYING ON OF BUSINESS IN SHARES. B) SHARES DID NOT CONSTITUTE STOCK IN TRADE. C) INVESTMENT WAS MADE FOR CAPITAL APPRECIATION. D) GAINS ASSESSABLE AS CAPITAL GAINS. 4 CIT VS. NIRAJ AMIDHAR SURTI 48 DTR GU. 33 ASSESSEE, CA, DERIVING INCOME FROM HIS PROFESSION AS WELL AS FROM PURCHASE AND SALE OF SHARES. INTENTION OF THE ASSESSEE HAD ALWAYS BEEN THAT OF MAKING INVESTMENT IN SHARES AND NOT DEALING IN SHARES HENCE PROFIT WAS ASSESSABLE AS CAPITAL GAINS. XIX) I AM ENCLOSING AS AN ANNEXURE TO THIS SUBMISSI ON A PAPER BOOK WHICH REFLECTS THE INVESTMENT IN SHARES AND ALSO THE WEEK LY PRICES OF SHARES WHICH WERE VERY VOLATILE FORCING ME TO SELL MY INVE STMENTS. XX) IN LIEU OF THE AFORESAID SUBMISSIONS, IT IS MY CONTENTION THAT THE INCOME DISCLOSED IS LIABLE TO BE TAXED UNDER THE HE AD CAPITAL GAINS AND NOT INCOME FROM BUSINESS/PROFESSION. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) ANALYZING THE ISSUE WITH VARIOUS CASE LAWS, DIRECTED THE AO TO RECALCULATE THE PROFIT FROM SALE AND PURCHASE OF SHARES AS INCOME FROM SHORT TERM CAPITAL GAINS. 6. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US RA ISING THE FOLLOWING GROUNDS OF APPEAL: 1) THE CIT(A) ERRED IN BOTH LAW AND FACTS. 6 910/HYD/2011 SMT. SUNITHA DEVI GAGGAR 2) THE CIT(A) ERRED IN DIRECTING THE AO TO TREAT TH E GAINS AS SHORT TERM CAPITAL GAINS INSTEAD OF BUSINESS INCOME AS ASSESSED BY THE AO. 3) THE CIT(A) OUGHT TO HAVE APPRECIATED THAT THE FA CT THAT AO HAS CORRECTLY TREATED THE INCOME AS BUSINESS INC OME AS THE INTENTION OF THE ASSESSEE WAS CLEAR FROM HER TR ANSACTIONS THAT HER INVESTMENT IN SHARES IS NOT FOR HOLDING TH E SHARES FOR A LONG TIME TO EARN DIVIDENDS BUT HER INVESTMEN T IN SHARES IS TO TRADE IN SHARES AND EARN PROFITS IN SH ORT TIME. THE VOLUME, THE FREQUENCY AND THE AMOUNT OF TRANSAC TIONS CLEARLY SHOWS THE INTENTION OF THE ASSESSEE. 4) THE CIT(A) ERRED IN DIRECTING THE AO TO TREAT TH E GAINS AS CAPITAL GAINS AS THE ASSESSMENT WAS COMPLETED KEEPI NG IN VIEW THE BOARD CIRCULAR NO. 4/2007 DATED 15/06/2007 WHEREIN THE PARAMETERS LAID DOWN TO DETERMINE WHETH ER THE SHARES WERE HELD AS STOCK-IN-TRADE OR INVESTMENT. 7. NONE APPEARED ON BEHALF OF THE RESPONDENT-ASSESS EE AT THE TIME OF HEARING BEFORE US. HOWEVER, WE PROCEED TO D ECIDE THE APPEAL AFTER HEARING THE LEARNED DR AND ON MERITS. 8. BEFORE US, THE LEARNED DR RELIED ON THE DECISION OF THE ITAT, HYDERABAD IN THE CASE OF CIT VS. P.V.S.RAJU & ANR. V/S. ADDL. COMMISSIONER OF INCOME-TAX (340 ITR 75)-AP. 8. WE HAVE HEARD THE LEARNED DR AND PERUSED THE REC ORD AS WELL AS GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE COORDINATE BENCH OF ITAT, HYDERABAD IN THE CASE OF CIT VS. ANIL KUMAR JAIN & RUPENDAR KUMAR JAIN IN ITA NOS. 163 & 164/HY D/2011 FOR AY 2007-08 DEALT SIMILAR ISSUE AS IN THE CASE UNDER CO NSIDERATION AND DECIDED THE SAME RELYING ON THE CASE OF PVS RAJU & ANR. (SUPRA), ON WHICH, RELIANCE PLACED BY THE LEARNED DR. THE COOR DINATE BENCH IN THE SAID CASE HELD AS UNDER: 8. WE HEARD BOTH THE PARTIES AND PERUSED MATERIA LS ON RECORD. THE CONTENTION OF THE ASSESSEES IS THAT IT ALWAYS TREATED THE 7 910/HYD/2011 SMT. SUNITHA DEVI GAGGAR SHARES ASS INVESTMENT, AND THERE IS NO BUSINESS ACT IVITY WHATSOEVER CARRIED ON BY THE ASSESSEES WITH REFERENCE TO SHARE S. 10. NOW THE QUESTION BEFORE US IS NOT WHETHER THE ASSESSEES HAVE CARRIED ON THE INVESTMENT ACTIVITY O R BUSINESS ACTIVITY. ON THE OTHER HAND, THE QUESTION IS WHEN THE ASSESSEES CLASSIFIED THE SHARES IN THE BOOKS AS INVESTMENTS, WHETHER REALLY THEY ARE INVESTMENT OR STOCK IN TRADE. ONE OF THE RELEVANT TESTS FOR DETERMINING WHETHER IT IS IN THE NATURE OF FIXED ASSET OR CONSTITUTES STOCK IN TRADE OF THE ASSESSEES BUSINE SS. FIXED ASSET IS WHAT THE OWNER TURNS TO PROFIT KEEPING THE ASSET IN HIS OWN POSSESSION, STOCK IN TRADE IS WHAT HE MAKES PROFIT OF BY PARTING WITH IT AND LETTING IT CHANGE MASTERS. IF THE EXPENDI TURE IS MADE FOR ACQUIRING OR BRINGING INTO EXISTENCE AN ASSET OR A DVANTAGE FOR THE ENDURING BENEFIT OF THE BUSINESS IT IS PROPERLY ATT RIBUTABLE TO CAPITAL. IF, ON THE OTHER HAND, IT IS MADE NOT FOR RUNNING T HE BUSINESS OF WORKING IT WITH A VIEW TO PRODUCE PROFITS IT IS REL ATABLE TO STOCK IN TRADE. IN DETERMINING THE QUESTION WHETHER AFTER AC QUIRING THE SHARES, THE ASSESSEE DEALT WITH IT AS AN INVESTOR O R CARRIED ON BUSINESS WITH IT TREATING IT AS ITS STOCK-IN TRADE OR AS A TRADING ASSET, WHAT IS RELEVANT IS THAT, IF THE CASE FALLS WITHIN THE FORMER CATEGORY, RECEIPTS BY WAY OF SALE OF SUCH SHARES WILL BE CAPI TAL RECEIPTS BUT IF IT FALLS WITHIN THE LATTER THE RECEIPTS WILL BE TRA DING RECEIPTS AND PROFITS THEREFROM BUSINESS INCOME. THE INTENTION W ITH WHICH SUCH OPERATION IS CARRIED ON IS RELEVANT. IF A OWNER OF AN INVESTMENT REALIZES IT AND OBTAINED A GREATER PRICE FOR IT THA N THE PRICE AT WHICH HE ORIGINALLY ACQUIRED, IF THE ENHANCED VALUE OBTAI NED FROM THE REALISATION OR CONVERSION OF SECURITIES MAY BE PROF IT FROM BUSINESS. THE DISTINCTION WHETHER THE INVESTMENT TRANSACTION IS A MERE REALIZATION OF THE INVESTMENT OR AN ACT DONE FOR MA KING PROFIT DEPENDS ON THE QUESTION WHETHER EXCESS WAS AN ENHA NCEMENT OF THE VALUE FOR REALISING THE SHARES BY A GAIN IN AN OPERATION OF MAKING PROFIT. IF THE TRANSACTION IS IN THE ORDINA RILY LIEN OF THE ASSESSEES BUSINESS, THERE WOULD HARDLY BE ANY DIF FICULTY IN CONCLUDING IT TO BE A TRADING TRANSACTION, BUT WHE RE IT IS NOT, THE FACT MUST BE PROPERLY ASSESSED TO DETERMINE WHETHE R IT IS IN THE NATURE OF TRADE. THE SURPLUS REALIZED ON THE SALE OF SHARE WOULD BE CAPITAL, IF THE ASSESSEE AN ORDINARY INVESTOR REALI SING HIS HOLDING, BUT IT WOULD BE REVENUE IF HE DEALS WITH THEM AS A TRADER. IF THE ASSESSEE IS AN ORDINARY INVESTOR, THE INCOME ARISIN G OUT OF SALE OF SHARES IS CAPITAL GAIN. ON THE OTHER HAND, IF HE T RADES IN SHARES IN REGULAR MANNER, IT IS INCOME FROM BUSINESS. IF AN INDIVIDUAL INVESTS IN SHARES FOR THE PURPOSES OF EARNING DIVIDEND, HE IS NOT CARRYING ON A BUSINESS. IF THE ASSESSEE IS HOLDING SHARES AS I NVESTMENT AND SOLD IT DUE TO CHANGE OF CIRCUMSTANCES AND EARNS PR OFITS, THAT PROFIT IS NOTHING BUT CAPITAL GAIN. WHETHER A PURCHASE IS MADE WITH AN 8 910/HYD/2011 SMT. SUNITHA DEVI GAGGAR INTENTION OF RESALE AND GAIN TO EARN PROFIT, SUCH I NCOME HAS TO BE TREATED AS INCOME FROM BUSINESS. LEARNED COUNSEL F OR THE ASSESSEE HAS 11. WHILE DECIDING WHETHER THE SALE OF SHARES IS INCOME FROM BUSINESS OR INCOME FROM CAPITAL GAIN, ONE HAS TO GO BY THE FOLLOWING CRITERIA, AS HELD BY THE JURISDICTIONAL H IGH COURT IN THE CASE OF P.V.S.RAJU & ANR. V/S. ADDL. COMMISSIONER OF I NCOME-TAX (340 ITR 75)-AP.- (A) THE FREQUENCY OF BUYING AND SELLING OF SHARES B Y THE APPELLANTS WERE HIGH; (B) THE PERIOD OF HOLDING WAS LESS; TRANSACTIONS, A ND NOT BECAUSE OF HUGE INVESTMENT; (D) THE INTENTION OF THE ASSESSEE TO MAKE QUICK PRO FITS ON A HUGE TURNOVER; (E) NO. OF SCRIPS SHARES HELD FOR FEWER DAYS; (F) WHETHER ENGAGED IN DEALING IN THES CAME SCRIPS FREQUENTLY; (G) INTENTION OF THE ASSESSEE IN BUYING SHARES IS N OT TO DERIVE INCOME BY WAY OF DIVIDEND ON SUCH SHARES, BUT TO EA RN PROFITS ON THE SALE OF THE SHARES; (H) WHETHER THE ASSESSEES HAD INDULGED IN MULTIPLE TRANSACTIONS OF LARGE QUANTITIES WITH HIGH PERIODICITY. THESE PE RIODIC TRANSACTIONS SELECTING THE TIME OF ENTRY AND EXIT IN EACH SCRIP, CALLED FOR REGULAR DIRECTION AND MANAGEMENT WHICH WOULD INDICATE THAT IT WAS IN THE NATURE OF TRADE; (I) REPEATED TRANSACTIONS, COUPLED WITH THE SUBSEQU ENT CONDUCT OF THE ASSESSEE TO RE-ENTER THE SAME SCRIP OR SOME OTH ER SCRIP, IN ORDER TO TAKE ADVANTAGE OF MARKET FLUCTUATIONS LENT THE FLAVOUR OF TRADE TO SUCH TRANSACTIONS; (J) THE ASSESSEES WERE PURCHASING AND SELLING THE S AME SCRIPS REPEATEDLY, AND WERE SWITCHING FROM ONE SCRIP TO AN OTHER; (K) MERE CLASSIFICATION OF THESE SHARE TRANSACTIONS AS INVESTMENT IN THE ASSESSEES BOOKS OF ACCOUNTS WAS NOT CONCLUSIVE ; (L) THE INTENTION OF THE ASSESSEES AT THE TIME OF P URCHASE WAS ONLY TO SELL THE SHARES IMMEDIATELY AFTER PURCHASE; (M) FREQUENCY OF PURCHASE AND SALE OF SHARES SHOWED THAT THE ASSESSEE NEVER INTENDED TO KEEP THESE SHARES AS INV ESTMENT; AND (O) IT IS ONLY FOR THE PURPOSE OF CLAMING BENEFIT O F LOWER RATE OF TAX, UNDER SECTION 111A OF THE ACT, THAT THEY HAD CLAIME D CERTAIN SHARES TO BE INVESTMENT, THOUGH THESE TRANSACTIONS WERE ON LY IN THE NATURE OF TRADE. 12. IN THE LIGHT OF THE ABOVE PARAMETERS AND THE DECISION OF THE JURISDICTIONAL HIGH COURT, ON PERUSAL OF THE ST ATEMENTS INCORPORATED BY THE ASSESSING OFFICER IN THE ASSESS MENT ORDER WE FIND THAT THE ASSESSEES HAVE MADE SEVERAL TRANSACTI ONS OF PURCHASE OF SHARES DURING THE RELEVANT YEAR UNDER CONSIDERAT ION, AND IF THERE 9 910/HYD/2011 SMT. SUNITHA DEVI GAGGAR HIGH VOLUME, FREQUENCY AND REGULARITY OF THE ACTIVI TY CARRIED ON BY THE ASSESSEES IN A SYSTEMATIC MANNER, IT WOULD PART AKE THE CHARACTER OF BUSINESS ACTIVITIES CARRIED ON BY THE ASSESSEE IN SHARES, AND IT CANNOT BE SAID THAT THE ASSESSEES HAVE MEREL Y MADE INVESTMENTS IN SHARES. IN OUR OPINION THE FINDINGS OF THE CIT(A) CANNOT BE SUSTAINED IN THE EYES OF LAW, AS HE HAS N OT CONSIDERED RELEVANT FACTS TO DECIDE THE ISSUE. ACCORDINGLY, W E REVERSE THE ORDER OF THE CIT(A) AND RESTORE THE ORDER OF THE AS SESSING OFFICER. 13. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE ALLOWED. 9. SINCE THE ISSUE UNDER CONSIDERATION IS MATERIALL Y IDENTICAL TO THE ONE DECIDED BY THE COORDINATE BENCH OF ITAT, HY DERABAD IN THE CASE OF CIT VS. ANIL KUMAR JAIN & RUPENDAR KUMA R JAIN (SUPRA), RESPECTFULLY FOLLOWING THE ORDER OF THE IT AT IN THE SAID CASE, WE SET ASIDE THE ORDER OF THE CIT(A) AND REST ORE THE ORDER OF THE AO. 10. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWE D. PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2012. SD/- SD/- ( CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED:31 ST OCTOBER, 2012. KV COPY TO:- 1) ACIT, CIRCLE 10(1), ROOM NO. 515, AC GUARDS, IT` TOWERS, HYDERABAD. 2) SMT. SUNITHA DEVI GAGGAR, PLOT NO. 158, ROAD NO. 12 , PHASE-II, GUNROCK ENCLAVE, SECUNDERABAD. 3) THE CIT(A)-VI, HYDERABAD 4) THE CIT-V, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D.